Correlation Between Datang International and Safran SA
Can any of the company-specific risk be diversified away by investing in both Datang International and Safran SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Datang International and Safran SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Safran SA, you can compare the effects of market volatilities on Datang International and Safran SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Datang International with a short position of Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Safran SA.
Diversification Opportunities for Datang International and Safran SA
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Datang and Safran is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA and Datang International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Datang International Power are associated (or correlated) with Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of Datang International i.e., Datang International and Safran SA go up and down completely randomly.
Pair Corralation between Datang International and Safran SA
Assuming the 90 days horizon Datang International Power is expected to under-perform the Safran SA. In addition to that, Datang International is 1.67 times more volatile than Safran SA. It trades about -0.21 of its total potential returns per unit of risk. Safran SA is currently generating about 0.09 per unit of volatility. If you would invest 21,160 in Safran SA on August 29, 2024 and sell it today you would earn a total of 560.00 from holding Safran SA or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. Safran SA
Performance |
| Timeline |
| Datang International |
| Safran SA |
Datang International and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Safran SA
The main advantage of trading using opposite Datang International and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International position performs unexpectedly, Safran SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Safran SA will offset losses from the drop in Safran SA's long position.| Datang International vs. Superior Plus Corp | Datang International vs. Origin Agritech | Datang International vs. Identiv | Datang International vs. INTUITIVE SURGICAL |
| Safran SA vs. DXC Technology Co | Safran SA vs. FANDIFI TECHNOLOGY P | Safran SA vs. DOCDATA | Safran SA vs. Datang International Power |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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